Connecticut Phone: 203-661-5222 | New York Phone: 914-397-2400 | Florida Phone: 239-302-2768

Your Leading Estate Planning, Taxation, Real Estate and Trust & Estate Litigation Firm.

ABA American Bar Association NYSBA WCBA Worcester County Bar Association Connecticut Bar Association CTLA ASPPA

Don't count on your children taking over the family business

When you have a successful family business that has been around for decades, perhaps even generations, you likely think it will continue to go that way once you retire or pass on. You are not alone in your belief. According to Business Law Today, 69 percent of family business owners assume children will take over the company.

However, the only way to ensure the continued success and family ownership of your business is through a thorough and valid succession plan, which only 23 percent of businesses have. Do not put your hard work and assets at risk based on familial expectations. Create a solid plan with a business law attorney to make the transition smooth and avoid family battles.

When family is not the best choice

As much as you would like to keep things in the family, members may be unqualified for the task. They may not be interested either, even if they take the position, causing the company to go downhill. On the other hand, they may want to take things in a direction of which you do not approve. Everyone may be fighting over who will be the boss, and they contend with other leaders and employees, as well. 

The potential challenges are numerous. It is more important that you choose a successor that is experienced and has similar values and goals. You may find this person in the family, but do not be afraid to look outside. 

How a succession plan helps

Of course, transferring ownership to an "outsider" may not go down well with your family. However, a strong succession plan can prevent legal disputes. Including your family in the process and transition can also help them accept and adjust better to the changes. You may even want to maintain some of their roles and powers but just have someone else in charge of daily business operations. You will also need to determine the division of shares and profits under the new structure.

No Comments

Leave a comment
Comment Information

Greenwich Office
25 Field Point RD
Greenwich, CT 06830

Phone: 203-661-5222 CT
Fax: 203-661-1197
Greenwich Office Location

White Plains Office
1 North Lexington Avenue
Suite 701
White Plains, NY 10601

Phone: 914-397-2400 NY
Fax: 914-437-6354
Map & Directions

Bridgehampton Office
2317 Montauk Highway
Bridgehampton, NY 11932

Phone: 203-661-5222 CT
Fax: 203-661-1197
Map & Directions

Naples Office
500 Fifth Avenue South
Suite 526
Naples, FL 34102

Phone: 239-302-2768
Fax: 239-325-1813
Map & Directions